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Jan 3, 2013

GMOs: Is All Natural All Right?

The debate over whether genetically modified foods can qualify as natural rages on.

Proposition 37, which sought to require disclosing that certain food included genetically modified organisms (GMOs), would have effectively prohibited food producers and retailers from claiming that genetically modified (GM) food was “natural,” making what is known as “all natural” litigation a veritable slam dunk for plaintiffs’ lawyers. While Proposition 37’s defeat may temporarily dampen plaintiffs’ lawyers’ appetites to pursue these claims, the debate over what is “natural” likely will continue until resolution at the federal level.

Proposition 37

Proposition 37 would have deemed GM food not natural, resulting in liability to producers and retailers for failing to label GM food as such or for labeling the food “natural” in any respect. This would have killed the ongoing debate over whether GM food is natural and would have removed a significant hurdle facing plaintiffs’ lawyers in “all natural” litigation—proving that consumers were misled into purchasing a product they thought was “natural”.

The failure of Prop 37 means that California plaintiffs’ attorneys remain where they have been—trying to certify classes of consumers who all purchased products because they claim to be “all natural” or include natural ingredients and who would not have purchased these products had they known they contained GMOs. Additionally, plaintiff attorneys must establish that “all natural” does not include GMOs, a proposition that has yet to be established in law.

Defining “All Natural”

Common Definition

The producers and retailers of products claiming to be natural typically defend false claims lawsuits on the basis that (1) the plaintiffs cannot prove they actually relied on the “natural” representation, (2) ingredients are plainly listed on the label and (3) the ingredients are “natural”. What “natural” means thus becomes an extremely significant issue. The dictionary definitions of “natural” are varied and broad: For example, it can mean “existing in or caused by nature” or “as if in nature.” Producers would argue that GMOs can exist in nature—once modified, many grow like any other organism. In fact, many of the fruits and vegetables that we readily consider natural today (grapefruit, for example) are the result of hybrids and/or genetic modification. And whether a food is like something in nature is certainly open to debate. Because virtually all foods are processed in some fashion, it would be difficult (and potentially arbitrary) to call some foods “natural” while saying others are not.

Of course, defining “all natural” in a legal sense will require spending significant sums for studies and experts, one side saying that high-fructose corn syrup (for instance) is simply cornstarch exposed to enzymes, each of which is natural, and the other side contending it is man-made and, therefore, not “natural.” These arguments continue apace in the wake of Proposition 37, not just in California but around the country.

Federal Regulations

Although the FDA first considered whether to define the term “natural” in 1993, it has declined to reach the issue because deciding what “natural” means was not a priority. With the notoriety of Proposition 37, however, that may change.

While the FDA has not expressly defined “natural” with respect to GMOs, when confronted with the issue, it has fallen back on its 1993 general statement that “natural” means “[a]ny food in which nothing artificial or synthetic has been included or has been added to a food that would not normally be expected to be in the food.” Of course, this again begs the question of what would “normally” be expected in food, especially where ingredients are on its label.

In any event, those that advocate a “common” definition of natural will likely have to recognize the ground that the FDA has already plowed.

Preemption

The FDA’s positions and their impact on how “natural” will be defined raise the issue of preemption—specifically, if the FDA acts and defines natural to include GM food, would that preclude state action like Proposition 37? In its recent decision in Pom Wonderful LLC v. The Coca Cola Company, the Ninth Circuit held that federal law may preempt California law on food labeling. Indeed, state regulation may be preempted provided the federal government could act. Thus, even if Proposition 37 had passed, or perhaps even if one of the myriad lawsuits goes to judgment, the FDA could render this discussion moot through its inherent rulemaking power.

Litigation

In the absence of federal regulation, different courts could reach different results with respect to these issues, one court finding that “natural” includes GM food and another finding the opposite. This will lead to forum shopping: Plaintiffs’ lawyers will try to sue in the latter states, effectively forcing the industry to change its labeling, at least for national producers and retailers. This would place increased pressure on the regulators to force a consistent practice to which food producers/retailers can adhere with consistency and certainty.

Whether plaintiffs’ attorneys will be willing to expend significant resources on these lawsuits in various states remains to be seen. Proposition 37 would have largely eliminated this cost/benefit analysis but now plaintiffs’ attorneys must decide whether to wait for others—regulators, legislatures or courts—to do the heavy lifting and decide the “all natural” issue. (Tellingly, various courts have stayed such litigation on the assumption that the FDA would act.) Historically, these cases settle before a decision is reached, since uncertainty on the issue may be preferable to an adverse decision.

If other states attempt to preclude labeling GM food as natural, one might expect a more circumspect approach that would avoid or reduce the consumer transaction and litigation costs that largely defeated the California effort. Regardless of what other states do, the failure of Proposition 37 does not herald the demise of future attacks on GM food: In the aftermath of Prop 37, new “all natural” lawsuits are filed almost weekly. That the food industry must continue spending significant resources defending these claims is a certainty. Less certain is whether anyone will allow these cases to actually decide the core question of whether GM food is “natural” and, if so, whether the federal government will finally approve or reject any such judgment with its own preemptive regulation.

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